Oct. 12 (Bloomberg) -- Google Inc. agreed to invest in an underwater transmission network that will be able to harvest electricity from wind farms off the Mid-Atlantic coast and power 1.9 million homes across Virginia, New York and New Jersey.

Google will buy a 37.5 percent stake in the development stage of the Atlantic Wind Connection project, Rick Needham, director of green business operations at the Mountain View, California-based Internet company, said in a blog post. The project will cost about $5 billion and Google’s initial investment will likely be about $200 million, the New York Times reported, citing project leader Trans-Elect Development Co.

The network and Google’s involvement will help spur the wind-energy industry in the U.S., which has lagged behind China in installing turbines, said Charlie Hodges, a wind industry analyst at Bloomberg New Energy Finance in London. Wind-power investment may reach $202 billion within two decades, according to estimates at industry group Global Wind Energy Council.

“The North American wind industry hasn’t had any players involved with the motivation and financial heft to really move this market forward,” Hodges said. “Google could play that role.”

Google and Good Energies, an investor in renewable-energy projects, agreed to each buy 37.5 percent of the equity portion of the project, with their stakes likely to fall after they bring in more investors, according to the New York Times. Japan’s Marubeni Corp. will own a 15 percent stake, said Daniel Welt, a vice president of development at Marubeni subsidiary.

Opening Up the Market

The group behind the project will set up a company to conduct a feasibility study by 2013 and plans to start the first phase in 2016, Marubeni spokesman Yo Nomura said, declining to comment on the cost.

The Mid-Atlantic region is well suited for the project because of its strong winds and shallow waters that make it easier to install turbines as far as 15 miles offshore, making them invisible from land, Google said on its blog.

The transmission network will span 350 miles and will be able to connect to 6,000 megawatts of power from wind turbines, Google said. That’s equivalent to 60 percent of the wind energy installed in the U.S. last year, the company said.

China will on average install turbines each year from 2009 through 2013 with the capacity to generate 18.7 gigawatts of power from the wind, New Energy Finance estimates. That’s more than double the 8.5 gigawatts annual average in the U.S.

“Each megawatt hour of offshore power carried down that interconnector has more chance of finding buyers, probably improving economics of offshore wind projects connected to it,” Hodges said. “This cable opens up markets and improves the chances of finding a buyer of offshore wind electricity.”

Monorail, Self-Driving Cars

Globally, wind power is expected to account for 22 percent of the world’s electricity generation within two decades, the Global Wind Energy Council said today.

The wind-power network is one of several environment- focused projects for Google, owner of the world’s most popular Internet-search engine. In July, Google agreed to buy most of the electricity generated by a NextEra Energy Resources LLC wind farm in Iowa, with plans to resell the power to wholesalers.

Last month, the company said it invested $1 million to fund the research and development of a monorail that’s powered by pedaling passengers. Last week, Google said it’s testing vehicles that drive themselves to help improve road safety and address environmental concerns.

Google, based in Mountain View, California, rose $3.83 to $542.67 at 9:36 a.m. New York Time on the Nasdaq Stock Market. Before today, the shares had dropped 13 percent this year.

(Updates with comment from analyst in 10th paragraph.) Oct. 12 (Bloomberg) -- Google Inc. agreed to invest in an underwater transmission network that will be able to harvest electricity from wind farms off the Mid-Atlantic coast and power 1.9 million homes across Virginia,...